Segment Reporting (Notes)

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes. We review operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. However, we have aggregated our properties into reportable segments as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies.

We operate in four business segments: the acquisition, redevelopment, ownership and management of retail real estate, office real estate, multifamily real estate and mixed-use real estate. The products for our retail segment primarily include rental of retail space and other tenant services, including tenant reimbursements, parking and storage space rental. The products for our office segment primarily include rental of office space and other tenant services, including tenant reimbursements, parking and storage space rental. The products for our multifamily segment include rental of apartments and other tenant services. The products of our mixed-use segment include rental of retail space and other tenant services, including tenant reimbursements, parking and storage space rental and operation of a 369-room all-suite hotel.

We evaluate the performance of our segments based on segment profit which is defined as property revenue less property expenses. We do not use asset information as a measure to assess performance and make decisions to allocate resources. Therefore, depreciation and amortization expense is not allocated among segments. General and administrative expenses, interest expense, depreciation and amortization expense and other income and expense are not included in segment profit as our internal reporting addresses these items on a corporate level.

Segment profit is not a measure of operating income or cash flows from operating activities as measured by GAAP, and it is not indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate segment profit in the same manner. We consider segment profit to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of our properties.

The following table represents operating activity within our reportable segments (in thousands):

	Year Ended December 31,
	2016			2015			2014
Total Retail
Property revenue	$	100,982		$	98,795		$	96,140
Property expense	(27,934		)	(25,672		)	(25,451		)
Segment profit	73,048			73,123			70,689
Total Office
Property revenue	103,254			97,651			92,474
Property expense	(31,839		)	(28,843		)	(27,003		)
Segment profit	71,415			68,808			65,471
Total Multifamily
Property revenue	29,188			19,455			16,976
Property expense	(12,498		)	(8,334		)	(6,099		)
Segment profit	16,690			11,121			10,877
Total Mixed-Use
Property revenue	61,664			59,722			54,410
Property expense	(35,660		)	(35,157		)	(32,678		)
Segment profit	26,004			24,565			21,732
Total segments’ profit	$	187,157		$	177,617		$	168,769

The following table is a reconciliation of segment profit to net income attributable to stockholders (in thousands):

	Year Ended December 31,
	2016			2015			2014
Total segments' profit	$	187,157		$	177,617		$	168,769
General and administrative	(17,897		)	(20,074		)	(18,532		)
Depreciation and amortization	(71,319		)	(63,392		)	(66,568		)
Interest expense	(51,936		)	(47,260		)	(52,965		)
Gain on sale of real estate	—			7,121			—
Other income (expense), net	(368		)	(97		)	441
Net income	45,637			53,915			31,145
Net income attributable to restricted shares	(189		)	(168		)	(374		)
Net income attributable to unitholders in the Operating Partnership	(12,863		)	(15,238		)	(9,015		)
Net income attributable to American Assets Trust, Inc. stockholders	$	32,585		$	38,509		$	21,756

The following table shows net real estate and secured note payable balances for each of the segments, along with their capital expenditures for each year (in thousands):

	December 31, 2016		December 31, 2015
Net real estate
Retail	$	629,261	$	638,893
Office	813,414		796,773
Multifamily	203,014		208,730
Mixed-Use	185,857		190,466
	$	1,831,546	$	1,834,862
Secured Notes Payable(1)
Retail	$	36,424	$	60,065
Office	206,550		292,183
Multifamily	73,744		101,444
Mixed-Use	130,310		130,310
	$	447,028	$	584,002
Capital Expenditures (2)
Retail	$	13,371	$	7,393
Office	46,476		49,049
Multifamily	2,463		81,559
Mixed-Use	895		634
	$	63,205	$	138,635

(1) Excludes unamortized fair market value adjustments and debt issuance costs of $1.8 million and $5.0 millionas of December 31, 2016 and 2015, respectively.

(2) Capital expenditures represent cash paid for capital expenditures during the year and includes leasing commissions paid.